Corporate Risk And Insurance Update

• Latest update to the Queensland Civil Liability Act 2003.

• Future economic loss claims by sportsmen.

• Court of Appeal asked to view surveillance tapes. Sumbul v Melbourne All Toya Wreckers P/L [2006] VSCA 292

On 7 January 2007 the Criminal Code and Civil Liability Amendment Bill 2007 was tabled in the Queensland Parliament, one purpose of which is to amend section 5 of the Civil Liability Act 2003 and to clarify Parliament's intention to exclude from the operation of the Civil Liability Act claims relating to injuries to employed workers arising in the course of employment even though the injury may have been caused by a third party.

Section 5 of the Civil Liability Act presently provides relevantly:

1. an injury as defined under the WorkCover Queensland Act 1996, other than an injury to which section 36(1)(c) or 37 of that Act applies; or
2. an injury as defined under Workers Compensation & Rehabilitation Act 2003, other than an injury to which section 34(1)
3. or 35 of that Act applies; or (c) an injury that is a dust-related condition; or
4. an injury resulting from smoking or other use of tobacco products or exposure to tobacco smoke."

Section 32 of the Workers' Compensation Rehabilitation Act defines injury as:

In the absence of the proposed amendment the obvious area of dispute in respect of any claim by an injured worker is whether "the employment is a significant contributing factor to the injury". This was illustrated in the Court of Appeal decision in Newberry v Suncorp Metway Insurance Limited (2006) QCA 48, a decision given on 20 March 2006. In that case the plaintiff worked for Dodds Agency, a firm which delivered smallgoods from Bowen to Airlie Beach and Proserpine. In the course of his employment he was a passenger travelling in a vehicle driven by his brother when another vehicle traversed onto the incorrect side of the road and collided with his vehicle.

The plaintiff did not bring an action against his employer but against Suncorp, the insurer of the vehicle at fault. At trial it was held that the plaintiff's injury was an injury as defined by section 32 of the Workers' Compensation Rehabilitation Act 2003 and therefore the Civil Liability Act did not apply to the claim.

The Court of Appeal did not agree and found that the employment was not a significant contributing factor, so that the Civil Liability Act applied. In Mr Newberry's claim there was no allegation that the employment contributed in any way to the injury allegedly caused by the breach of duty owed to the plaintiff by the appellant's insured. The effect of the proposed amendments is to reverse the Court of Appeal's reasoning. If the amendment is passed and this seems more than likely section 5 will relevantly read as follows:

"5 Civil Liability excluded from Act

This Act does not apply in relation to deciding liability or awards of damages for personal injury if the harm resulting from the breach of duty is or includes-

1. (a) an injury for which compensation is payable under the WorkCover Queensland Act 1996, other than an injury to which section 36(1)(c) or 37 of that Act applies; or

(b) an injury for which compensation is payable under Workers' Compensation & Rehabilitation Act 2003, other than an injury to which section 34(1)(c) or 35 of that Act applies; or

2. For subsection (1)(a) or (b), the following is immaterial -

3. To remove any doubt, it is declared that a breach of duty mentioned in subsection (1) includes a breach of duty giving rise to a dependency claim.

4. In this section -

The Civil Liability Act will not apply in relation to any work injuries, apart from recess and journey claims, whether or not the injured worker claims against the employer, host employer or a third party and whether or not the employment activities performed by the injured party were a significant contributing factor to the injury. In other words it appears that if the worker is injured during the course of his employment then any claim they make will not be subject to the Civil Liability Act with the exception of recess and journey claims.

It is to be noted that certain new subsections have also been introduced and in particular:

• " Sub-section (2) clarifies that for the purpose of section 51 it is immaterial whether compensation for an injury is actually claimed under the relevant Workers Compensation Act or whether an entitlement to seek damages is regulated by that Act.

• " Sub-section (3) declares that a breach of duty mentioned in section 5(1) includes a breach of duty giving rise to a dependency claim.

• " Sub-section (4) clarifies that compensation under a relevant Workers Compensation Act includes payment for medical treatment or attendances and funeral expenses (i.e. statutory benefits).

The amended section 5 of the Civil Liability Act will only apply if the personal injury, or any part of it, was caused on or after 6 November 2006. Except in circumstances where the parties have agreed to settle the claim or a trial has commenced but not finished or where final relief has been granted by a court, in which event section 5 as in force before 6 November 2006 will continue to apply.
By James Chrara, Brisbane

Future Economic Loss Claims By Sportsmen

Introduction

Defendants and their insurers, particularly those involved in sport, will be interested to learn of two recent cases. They involve claims by sportsmen, who were injured as a result of the defendants' negligence, and sought significant sums for future economic loss. In each case the court did not accept the claimant's assertions.

First case

The first case (Reardon-Smith v Torres-Farr) involved a professional surfer from Queensland. The claimant suffered injuries to his lower back, neck, hip and knee. These injuries did not, after rehabilitation, prevent him from continuing to compete in surfing. However they had some, disputed, level of effect of his surfing ability.

The claimant alleged that if it wasn't for the injuries, he would have progressed to the highest competition in professional surfing, the World Championship Tour (WCT). The evidence was that good money can be made once a surfer is in the WCT, but the pickings are significantly slimmer in the lower competitions. A claim was made for significant losses of future income, on that basis.

In order to be elevated to the WCT, a surfer first had to progress through the World Qualifying Series (WQS).

Prior to his injuries, the claimant was ranked first in the Queensland Championship Circuit. (He was also in the top 3 aerial surfers in Australia). However, he had not achieved much success in the WQS.

After his injuries settled, the claimant returned to surfing and by the time judgment was delivered by the court, he had regained his number one rank in the QCC. The evidence showed that the claimant also competed in the WQS, but again with little success.

The claimant's counsel argued that the timing of the claimant's injuries prevented him from success in the WQS and hence elevation to the 'big time' of the WCT. In the year of the injuries (2004) the WQS was to introduce points for aerial manoeuvres (which was the claimant's greatest strength), giving the claimant a competitive advantage. Also, a major aerial surfing competition had ceased in 2003, so that the claimant could dedicate himself to conventional surfing in the WQS in 2004.

The defendant countered with evidence that the claimant did not have the funds to travel and fully compete in the WQS in 2004, due to his limited prior success. The defendant also adduced evidence that the claimant had told a journalist that his aerial surfing sponsor required him to concentrate more on that discipline, meaning he could not focus on the WQS.

The court looked at the evidence in detail. It found that the most likely scenario was that the claimant could not have funded the numerous overseas trips needed to fully compete in the WQS, and even had he done so, his chances of succeeding (and hence then qualifying for the WCT) were slim. A global award of $35,000 was made for future economic loss, on the basis that the claimant was to some extent disadvantaged in professional surfing by his injuries.

In second case (McCracken v Melbourne Storm Rugby League Football Club) was heard in New South Wales. The well known ex-rugby league player Jarrod McCracken was injured from a spear tackle which rendered him unfit to continue his professional sporting career.

McCracken had intended to continue this career under the contract with his Australian club, and once that expired, in England (where the best money can be made). The injury put an end to that and he sought his expected future earnings in damages.

In evidence, McCracken stated that for some time prior to the injury he would read the property guide in the Sydney Morning Herald. He quipped that his football colleagues preferred reading the horse racing guide. His knowledge was turned into practise in property development, and as a consequence, by the time of the injury he had generated net assets of $15 million.

After the injury, given that playing football was no longer an option, McCracken focussed his time and efforts exclusively on property development. These efforts proved exceptionally profitable. It was held by the Supreme Court of New South Wales that McCracken would not have been able to avail himself of such property development opportunities, and make such profits, had he moved to England to continue his professional football career.

Looking at the evidence it was found by the court that McCracken did not suffer a reduction in earning capacity due to the injury - unusually his earning capacity was proven to have increased, because he had more time to spend on the more profitable activities of property development.

This shows how important it is to carefully examine all of the evidence of a claimant's actual earnings and earning capacity. Naturally, had McCraken favoured the racing guide over the property guide, the evidence, and ultimately the court's decision, would have been different.

Conclusion

These cases show that the claimant may not satisfy the burden of proving an asserted loss of future earning capacity. However the defendants and their insurers in these cases did well to properly investigate the assertions and adduce evidence to assist the courts in finding that the claims, although theoretically attractive, did not have substance in evidence.
by David Slatyer, Brisbane

Court Of Appeal Asked To View Surveillance Tapes

The Victorian Court of Appeal was recently asked to view surveillance footage in the course of an appeal. The Court, consisting of Appeal Court Justices Chernov, Nettle and Redlich took differing approaches to the issue. Only two of the three Appeal Court Justices viewed the surveillance footage, yet the Court unanimously dismissed the appeal.

The Appeal by Yakup Sumbul was bought against the decision of a County Court judge who, at first instance, dismissed the Appellant's originating motion by which he had sought leave pursuant to the Accident Compensation Act (Victoria) 1985 to initiate proceedings for the recovery of damages sustained by him in the course of employment with the respondent. The Appellant was required to show that the injury was a 'serious injury' by reference to the consequences specific to him judged at the time of the hearing. In dismissing the motion, the Judge concluded the Appellant had failed to establish the injury was a 'serious injury' in that he failed to demonstrate the consequences to him were 'at least very considerable'. On Appeal, the Appellant sought to show the vast majority of evidence contradicted the judge's conclusion the Appellant was not a credible witness.

Whilst the County Court Judge had some 29 medical reports tendered, no authors of the reports were called for cross-examination. The Appellant was the only person to give oral evidence, supplementing his evidence given by way of 2 supporting affidavits. It was the Appellant's contention in his evidence that the back injury he sustained caused constant pain and discomfort and limited his ability to move freely. The appellant specifically noted an inability to stand, sit or walk for extended periods. Under cross-examination, the Appellant at first instance gave evidence that he had never tried to squat, his activity upon his motor vehicle was limited to checking the oil and water, washing it once or twice and to have changed a flat tyre once. With respect to gardening, his evidence was the activity did not involve any digging.

In reply, the Respondent in the County Court showed video of the appellant walking, squatting, driving and gardening.

In the course of the Appeal, counsel for the Appellant ultimately urged the court to view the surveillance films. Counsel for the Respondent did not directly ask the Court not to view the films, instead submitted the Court should only view the films if it were satisfied the County Court judge erred in her interpretation of them. Such view to initially be formed by reference to the balance of material before the Court. Counsel for the Respondent submitted that an interpretation of the film was very much a matter of impression. Counsel referred to the decision of CSR Ltd v Della Maddalena where the High Court noted such impression was to be formed from 'actually seeing and hearing the evidence of the witnesses….and of observing his reaction to each segment of film as it was shown to him'.

Nonetheless, Appeal Court Justices Chernov and Nettle viewed the surveillance footage. Justice Chernov reluctantly concluded it was appropriate to view the film as it played a significant part in the County Court Judge's decision making process and partly because the Appellant contended it supported his case. Justice Nettle did not expand upon his conclusion to view the film, but concluded in similar terms to Justice Chernov that the film illustrated substantial inconsistency with the Appellant's submissions.

In not viewing the film, Justice Redlich adopted the views of counsel for the Respondent - that it was not necessary to view the films unless other evidence illustrated the judge at first instance had erred in reaching her conclusions. This, in his view, was not made out.

Discussion

It is an unusual step for an Appeal Court to take - to view surveillance footage or to enquire into evidence about the lack of credibility of the witness/appellant. As was noted by the High Court in Della Maddalena 'the subtle influence of the [plaintiff's] demeanour cannot be overlooked; it is a case in which it does not follow that because the trial judge made no express reference to demeanour, demeanour played no part in [her] findings'.

I suggest, but for the assertion of counsel for the Appellant that the surveillance footage in fact supported its case and not that of the Respondent, the majority of the Appeal Court would not have availed itself of the opportunity to view the footage. Issues of credibility often play a major role in the determination of personal injury actions before a court, however it is infrequently the role of the Appeal Court to inquire into the findings of credibility or otherwise of a plaintiff. Such a determination is made having regard to all the verbal and non-verbal cues available to a trial judge which are often not available or able to be replicated in the Court of Appeal.
By Stuart Eustice, Melbourne

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.